MAJURO — The Marshall Islands has rejected the U.S. government’s first Compact funding offer, with Foreign Minister Gerald Zackios saying the government is “disappointed” with the small amount of funding in the U.S. counter-proposal.
“We’re very disappointed that the U.S. counter-proposal didn’t look at our proposal carefully to see we had well-thought-out numbers aimed to create financial stability,” Zackios said in an interview.
Zackios said that the Marshall Islands considers its relationship with the U.S. “special and unique.” But, he added, the limited funding proposed in “the U.S. counter-proposal makes us question how special the U.S. considers the relationship.”
The U.S. has replied to the Marshall Islands request for $68 million annually with a figure that proposes a more than 50 percent cut. The U.S. is proposing $45 million annually—but that amount includes $13.6 million in annual rent payments to landowners at the Kwajalein missile testing range and an $8 million annual trust fund contribution, effectively reducing the annual grant funding to the government to just $23.4 million—a 27 percent cut in annual grant assistance over current U.S. funding levels to the Marshall Islands.
The U.S. proposal of an $8 million annual trust fund contribution is a 56 percent reduction over the Marshall Islands $18 million request for its trust fund.
The one aspect of the U.S. proposal that is to the advantage of the Marshall Islands is the U.S. agreement of a 20 year, rather than a 15 year, time period for the second Compact funding.
Zackios said the U.S. position of linking the Kwajalein rental payments with grant assistance is wrong. “Kwajalein payments shouldn’t be lumped with the base grant to the Marshall Islands,” Zackios said. The Kwajalein payments go directly to the landowners and the government has no say in the use of this money because it is a rental payment to the landowners.
The Kwajalein rent issue isn’t on the table for negotiation, since the rental figure was agreed to in the early 1980s and the current U.S. lease for the Kwajalein missile range runs through 2016. Marshall Islands officials are unhappy that, despite the fact that Kwajalein isn’t a subject of negotiations, the U.S. included the rental payments as part of the future funding plan, which they say gives the appearance of larger-scale funding than is actually the case.
The Marshall Islands has complained to the U.S. about inequities in the per capita amounts of U.S. grant assistance to the Marshall Islands and its neighbor, the Federated States of Micronesia, which has its own Compact with the U.S.
